Dollar Drops against Major Currencies

By IBT Staff Reporter On 02/17/11 AT 1:09 PM

The U.S. dollar fluctuated today against major currencies, where concerns over the political unrest in the Middle East alongside mixed economic data from the United States provided investors with a lot to think about, where demonstrations spread across the Middle East from Libya to Yemen and Bahrain, as demonstrators are calling for political, social, and economic reform.

Meanwhile, the U.S. released the CPI for the month of January, where CPI showed that inflation rose above expectations, moreover, the jobless claims rose above estimates, as conditions in the labor market remain weak the United States, also, the leading indicators for January came in below expectations, however, the Philadelphia Fed index rose to the highest level in 7 years amid rising inflation.

The U.S. Dollar index, which measures the performance of the U.S. dollar against a basket of currencies including the Euro, the Pound, and the Yen, declined on daily basis to trade at 77.99, compared with the opening level at 78.16, while recording a high of 78.35 and a low of 77.93. Gold prices rose amid the dollar's weakness to reach $1383.11, compared with the opening level at $1375.50 an ounce and crude oil prices inclined to trade at $85.47, compared with the opening level at $85.20.

The Euro inclined against the Dollar today, where the EUR-USD pair is trading at $1.3597, compared with the opening level at $1.3574, while recording a high of $1.3619 and a low of $1.3536. The pair is now trading below the important level at $1.3630 and so long it continues to trade below this level, the target is set at the $1.3505 support level, but breaching the resistance at $1.3630 to the upside would send the pair to the resistance at $1.3755.

The British Pound inclined against the U.S. Dollar, where the GBP-USD pair is now trading at $1.6168, compared with the opening level at $1.6091, while the pair recorded a high of $1.6187 and a low of $1.6075. The pair is now trading above the $1.6160 level, and accordingly it should continue to rise towards the $1.6345 resistance level, but breaching the $1.6160 to the downside would reactivate the target at the $1.6070 support level.

The U.S. Dollar declined against the Japanese Yen, where the USD-JPY pair is now trading at ¥83.29, compared with the opening level at ¥83.60, while recording a high of ¥83.74 and a low of ¥83.15. The pair is now trading below the ¥83.45 resistance level, which suggests that the way is open to reach the ¥81.85, but the pair must remain below ¥83.45 in order for this bearish scenario to continue.